Wages Council Orders Enforcement (Hansard, 9 March 1982)

§ Mr. Don Dixon (Jarrow)
I beg to move, That leave be given to bring in a Bill to provide for the automatic prosecution of and the publication of the identity of employers who pay their employees wages below wages councils' statutory minimum rates. Little did I think, when I sat outside the Private Bill Office for many hours some weeks ago, that my Bill would cause so much interest. It is good to see so many hon. Members here to support it.
Most workers in the United Kingdom have a direct influence on their pay levels via negotiations and voluntary agreements between their employers and trade unions. But some 3 million workers have no such influence on their pay levels. They are working in industries where it is difficult to establish collective bargaining agreements. Therefore, they are covered by .the minimum wage rates and conditions laid down by the wages councils. [Interruption.] I know that there are many Conservative Members who are not interested in the 3 million unemployed or the plight of old-age pensioners or those on supplementary benefits, but if they kept quiet and listened people outside might think that they had some sympathy for the lower paid.
I declare an interest as a Member sponsored by the General and Municipal Workers Union, which has fought very hard for the lower paid workers. The wages councils have been in existence in various forms since 1910. They now cover 27 industries of which the largest are hairdressing, hotel and catering, retail—[Interruption.]

§ Mr. Speaker
Order.

§ Mr. Barry Sheerman (Huddersfield, East)
On a point of order, Mr. Speaker—[Interruption.]

§ Mr. Speaker
Order. There is as much noise coming from Labour Benches as there is from the Conservative Benches. The hon. Gentleman must realise that there is some excitement in the House. I think that hon. Members are waiting for a statement, which is why there is all this chattering.

§ Mr. Dixon
Thank you, Mr. Speaker. I thought that hon. Members were waiting to hear about the contents of my Bill.
The wages council system, despite many and sometimes justifiable critisisms made of it, is the minimum safety net for some 3 million low paid workers. When I say low paid, I mean low paid. We are talking about people who are earning between £35.50 and £57.70 for a 40-hour week, compared with the national average earnings of £120 a week. In many instances, the workers concerned would be better off drawing social security benefit.
The major critisism of the wages council system is that it does not protect the very people that it is designed to protect. By and large, the people working in areas covered by wages councils are working in small units subject to the mercy of employers and without the protection of the trade unions.
724 Many workers in wages council industries are women whose income is essential to sustain the family income. This makes it more important that the wages council system works on their behalf. It is bad enough that those who complain to the wages inspectorate because they are underpaid have no protection against unfair dismissal; what is wrong is that there is no sanction against the employers who are caught underpaying. Any underpaying employer can confidently expect to escape checks of any sort on his activities since the government have reduced the size of the wages inspectorate by one third.
It was already a major task for the 177 members of the wages council inspectorate to ensure that the ½ million employers subject to the legal requirements of paying a minimum wage did so. By reducing the size of the inspectorate to 117 the Government have increased the odds against the low paid even more substantially.
Those employers who receive their once-in-10-years inspection can always take comfort from the fact that even if they are caught underpaying it is extremely unlikely that anything will happen to them. Of the 37,000 firms visited in 1980, 12,000 were found to be paying below the minimum rate. Those 12,000 were found to owe their waiters about £2 million. In certain wages council ndustries it is even worse. For example, in hotels 4,000 waiters were owed £300,000, while in pubs 5,500 were owed nearly £1½ million. Another 1,000 workers in cafes were found to be owed £78,000.
In other words, of the £2 million stolen from the workers covered by the 27 wages councils, over £800,000 was stolen from the 10,500 workers. Besides this, 3,500 places of work do not even bother to inform their waiters that they are legally entitled to a minimum wage and approximately 6,000 hid possible evidence of their wrong doing by not keeping any record of wages. Because the inspectorate—[Interruption.]

§ Mr. Harry Cowans (Newcastle upon Tyne, Central)
On a point of order, Mr. Speaker. I realise that this is an exciting day for many hon. Membersembers. However, other hon. Members have come to the Chamber to listen not only to the Chancellor of the Exchequer but to what my hon. Friend the Member for Jarrow (Mr. Dixon) has to say, regardless of where the noise is coming from.

§ Mr. Speaker
Order. The hon. Member for Newcastle upon Tyne, Central (Mr. Cowans) is right. Everyone is entitled to be heard as he submits his argument to the House.

§ Mr. Dixon
Because the inspectorate inspects each establishment only once in 10 years, it has been estimated that the real amount of underpayment is £28 million. That is the sum that is stolen each year by 12,000 individuals. If I or any other hon. Member were robbed of £75 it would be uncomfortable and disturbing. For people on £35 a week it is a tragedy and a disgrace.
The Government bear a heavy responsibility. If the known extent of theft is anything like the amount that is covered up, the Government are deliberately encouraging theft by these employers. What happens to the employers? Most of the time they are simply rapped over the knuckles and told to be good boys and not to do it again. Of the 12,000 known employers who underpay—and we must remember that we are talking of underpayment on basic pay, not on complicated things such as premiums and 725 overtime payments—nine were prosecuted, eight were fined less than £175 and only one was fined more than £3,000.
The excuse given for non-prosecution is generally that the wage council orders are difficult to understand, but complicated though the legal documents orders are, and the many orders simplifying them, the one easy part of each document is what is the basic hourly rate.
If I were caught stealing from a supermarket, having put groceries on my trolley and then walked out into the street and been caught by a policeman, I doubt whether the policeman would be very sympathetic if I said that I did not understand the system and did not realise that I should have paid the girl near the door. Yet 11,991 employers were allowed to steal large sums from their workers and just plead ignorance.
Another argument is that the time taken to prepare a prosecution on this issue reduces the time available for inspection. I have some sympathy with that view, but the local chief constable would have short shrift if he argued that time spent prosecuting local burglars meant that there was no time to catch new ones breaking and entering.
One of the greatest deterrents against theft, especially to those not accustomed to being called thieves, is to have their names publicised in the local newspapers. Even where offenders are not prosecuted—the figures show that nearly 50 per cent. get away with this type of theft—there would be a deterrent if the people concerned were named. One wages inspector told the licensed residential establishments wages council that naming individuals could lead to libel actions, and therefore those who stole from their workers could remain anonymous.
The Bill provides for automatic prosecution in any case of infraction and for the automatic naming of the individual so prosecuted, I envisage that names of the individuals concerned would be posted in the local jobcentre so that waiters seeking work would know whether the employer had been caught with his fingers in the waiters' pay packets. Clearly, this would mean that the Government would have to reverse their penny-pinching, mean-minded policy of allowing those least able to cope with the recession to flounder even more. The Government would have not only to restore the fear of the inspectorate but to double its numbers. The combination of those three steps would put a speedy end to the scandal of the £28 million stolen each year.
I hope that what the Bill seeks to do for low paid workers at 3.30 pm will not be undone by the Chancellor of the Exchequer's Budget by 4.30 pm.

§ Mr. Stan Thorne (Preston, South)
rose—

§ Mr. Speaker
Order. Is the hon. Gentleman seeking to catch my eye to oppose the Bill?

§ Mr. Thorne
Yes, Mr. Speaker.

§ Mr. Speaker
I shall, of course, call the hon. Gentleman, but I must make it clear to him that he must oppose the Bill in his speech.

§ Mr. Thorne
My purpose in opposing the Bill will become obvious from what I am about to say.
First, the House should congratulate my hon. Friend the Member for Jarrow (Mr. Dixon) on having moved the motion on this particular day. Low pay in Britain now—

§ Mr. Speaker
Order. It appears that the hon. Gentleman intends to speak in support of the Bill. I must say to him that it would be very unfair to waste the time of the House today on a gesture of that sort.

§ Mr. Thorne
It was certainly not my intention to waste the time of the House. In my view, it would be a salutary conclusion if the House overwhelmingly, by its vote, showed its complete support for the motives—

§ Mr. Speaker
Order. I request the hon. Gentleman to resume his seat.